The U.S. spends $1 trillion on food every year. Even so, our food system has massive downstream costs, including costs associated with the climate crisis and health care costs linked to diet. What are some of these hidden costs and how can we better account for them?
These important questions are taken up in a new book: The True Cost of Food: Balancing the Scales. A recent true cost study by the Rockefeller Foundation revealed that the hidden costs of food are three times more than the sticker price. For more on the topic, we spoke with Paula Daniels, one of the book’s editors and an advisor to the Rockefeller Foundation study. Daniels is a co-founder and “chief of what’s next” of the Center for Good Food Purchasing, a pioneering group that influences billions in institutional food spending at public institutions such as school districts.
Ashoka: Paula, what is true cost accounting? Can you give us a primer?
Paula Daniels: True cost accounting is a framework that considers, and makes visible, the hidden costs of producing food. Let’s take three examples: an organic apple, a conventionally grown apple, and a hamburger. What you pay for an organic apple, grown locally, is closest to the true cost of producing the apple. It might cost a little bit more upfront than the non-organic apple, but it doesn’t have any hidden costs. Whatever you’re paying for the organic apple, that includes the cost of not having pesticides used that will cause negative effects on the environment.
Ashoka: And the other apple, and the hamburger?
Daniels: A conventionally raised apple has some hidden costs, due to how it was grown, that will be paid for by the public in terms of harm to the environment and health problems experienced by workers exposed to the pesticides. Now for the hamburger — a fast food burger may cost roughly the same as the organic apple, but that price is artificially low because it reflects the hidden subsidies for the grain that fed the cattle, the hidden costs of greenhouse gas emissions, water use, and water pollution that are a consequence of the way the factory farmed beef was raised. The public pays for the climate and water impacts. So in the end, the organic apple is more “true costed” — in other words, fewer hidden costs are foisted on the public.
Ashoka: So, what we pay at the store is misleading?
Daniels: Limited, I would say. It’s a financial transaction that looks only at the tip of the iceberg. Look below the iceberg, and there’s all these hidden costs. So when you do the true cost accounting analysis to take into account all of the dimensions that are impacted by food production and distribution, you find that food costs roughly three times what we pay for it. We can thank the Rockefeller Foundation for undertaking that analysis of the U.S. food system — which builds on the ideas we set out in our book.
Ashoka: Tell us about the book and how it came about.
Daniels: Our book grew out of the community of practice of the Global Alliance for the Future of Food. It was the idea of my co-editor, Barbara Gemmill-Herron. We thought it would be helpful to pull together the varied perspectives on true cost accounting in one place, to serve as a guide for policy makers. The timing was fortunate, as momentum is increasing to use true cost accounting as a way to shift government, public, and business perspectives on what the the true values and priorities are — or should be — in our food system. An increasing drum beat.
Ashoka: Who are you hoping to reach?
Daniels: A range of audiences, from academics to policymakers to entrepreneurs to concerned citizens and consumers. We tapped into a range of voices to speak to the various entry points a reader might have into the topic. We have chapters on the social, economic and ecological impacts of maize (or corn) production; chapters on healthy soils in California, the real cost of unhealthy diets, the true cost of poor wages, and on international policy opportunities. We have an important contribution from Kathleen Merrigan — who used to be the Deputy Secretary at the USDA — on how true cost accounting builds on cost benefit analyses that agencies are already required to do, but adds dimensions. All of these chapters and reports are, we hope, conversation starters for the various audiences.
Ashoka: Any new angles that surprised you?
Daniels: The faux meat study surprised me the most. I personally like the idea of having a plant-based alternative to factory farmed meat available as a dietary choice, because the impacts of factory farmed meat production are significant. A recent study in Nature Food shows food production as responsible for about a third of all greenhouse gas emissions; of that amount, meat accounts for 60%. So, reducing factory farmed meat consumption in favor of plant-based foods is an environmentally conscious choice that a consumer can make. In my view, transitioning away from a daily or more than once a day amount of meat with the plant-based or faux meats is a good option. We have a chapter in the book that sets out what must be looked at in an analysis of environmental, social, economic and health impacts of faux meat (plant-based, in this case — not stem cell-based) as compared with factory farmed meat. It’s worth a read.
Ashoka: What did you contribute to the collection?
Daniels: In addition to editing and writing some introductions, I wrote a chapter called “True Cost Principles in Public Policy: How Schools and Local Government Bring Value to Procurement.” My co-editors asked for the chapter, as they wanted to shine a light on school lunch and how values-based purchasing — such as through our Good Food Purchasing Program — aligns with the multi-dimensional analyses of true cost accounting. We focus on five core values: local economies, health, valued workforce, animal welfare, and environmental sustainability. I’m glad to see that an esteemed colleague, Professor Raj Patel, agrees with our approach. He recently commented on this in an opinion piece he wrote for Nature Food.
Ashoka: Can we expect to see food labelling based on true costs?
Daniels: That would be great! You know, I want to give Mark Bittman some credit for thinking of that, too. In 2012, he and the New York Times worked with a company to design and propose a food label with rating bars for Nutrition, Foodness (how close to whole), and Welfare (how people are treated). I thought it was great. I’d add one for Planetness, or something like that. Then voila, you’ve got something close to True Value metrics on an accessible scale so that any one of us could look at a food product and make a decision whether to buy it. I think this could be so great. But as a priority for me, I’d like to see the shifts to happen on a more structural governmental level. We need to look at the priorities and what we will support, what we will subsidize — how we will manage for negative externalities in the U.S. and with our trade partners.
Ashoka: Earlier you mentioned Rockefeller Foundation and their new study. Tell us more about that.
Daniels: The work that the Rockefeller Foundation is doing is extremely promising in terms of catalyzing the national conversation around this topic and helping to focus on some areas of study that could be valuable in terms of how to reorder priorities and investment in the food system. And what kind of return on investment society can get for the price or the program investment in a food product or a food program. They published a study in July, called True Cost of Food: Measuring What Matters to Transform the U.S. Food System. The conclusion: the true, hidden cost of food is three times more than what we pay for it. We recently partnered with them on a True Cost case study on U.S. school meals, in which we were pleased to report that there is actually double the value in return on investment in the school meal program, in terms of health benefits and poverty alleviation. And, with some changes in procurement practices, we found that there could be even more benefits to workers and the environment. I was glad to see that a true cost analysis could show positive net benefits.
Ashoka: What is one thing you’d like folks to take away from your book and the case studies?
Daniels: That what we measure, matters.
Paula Daniels is Co-Founder and Chief of What’s Next for the Center for Good Food Purchasing. She is also founder of the Los Angeles Food Policy Council, and a recipient of the Ashoka Fellowship in 2018.